The hematopoietic-specific Rho GTPase, Rac2, regulates a variety of cellular functions including cell shape changes, motility, integrin-dependent adhesion, and apoptosis. In the study reported here, we demonstrate that wild-type (WT) hematopoietic stem cells/progenitors (HSC/P) preferentially engraft in nonablated Rac2(-/-) bone marrow. In addition, primitive Rac2(-/-) HSC/P transplanted into lethally irradiated WT recipients showed a significant competitive defect compared with WT cells. These defects appeared to be related to HSC/P-intrinsic defective microenvironment interactions, since Rac2(-/-) cells showed less adhesion to the femur bone marrow density 1 (FBMD-1) stromal cell line, a lower frequency of cobblestone area-forming cells, and lower performance in long-term marrow cultures in vitro when compared with WT cells. In contrast, primitive Rac2(-/-) hematopoietic cells exhibited normal progenitor colony formation in semisolid medium in vitro and normal proliferation in the steady state in vivo when compared with WT cells. Taken together, these data suggest that Rac2(-/-) stem/progenitor cells exhibit abnormal interaction with the hematopoietic microenvironment, which leads to defective long-term engraftment.